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Does the Structure of Multinational Enterprises' Activity Affect Technology Spillovers?

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  • JINJI Naoto
  • ZHANG Xingyuan
  • HARUNA Shoji

Abstract

We examine how the structure of multinational enterprises' (MNEs') activity affects technology spillovers between MNEs and their host economies by using firm-level data of Japanese MNEs and patent citations data. We construct new measures of foreign direct investment (FDI) by exploiting information on sales and purchases of foreign affiliates of MNEs. Pure horizontal (vertical) FDI is defined as FDI with a high share of transactions (i.e., both purchases of inputs and sales of outputs) in the local market (with the home country). Partially horizontal and vertical FDI are also defined. We then estimate the effects of these types of FDI on technology spillovers captured by patent citations. Our findings reveal that when developed economies host Japanese MNEs, pure vertical FDI has significantly positive effects on technology spillovers in both directions. When developing economies host Japanese MNEs, by contrast, no form of FDI significantly facilitates technology spillovers in either direction.

Suggested Citation

  • JINJI Naoto & ZHANG Xingyuan & HARUNA Shoji, 2011. "Does the Structure of Multinational Enterprises' Activity Affect Technology Spillovers?," Discussion papers 11027, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:11027
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    Cited by:

    1. Naoto Jinji & Xingyuan Zhang & Shoji Haruna, 2012. "The Effect of Regional Trade Agreements on Technology Spillovers through International Trade," Discussion papers e-11-006, Graduate School of Economics Project Center, Kyoto University.
    2. Naoto Jinji & Xingyuan Zhang & Shoji Haruna, 2015. "Trade patterns and international technology spillovers: evidence from patent citations," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(4), pages 635-658, November.
    3. Naoto Jinji & Xingyuan Zhang & Shoji Haruna, 2013. "Do Regional Trade Agreements Enhance International Technology Spillovers?," Discussion papers e-12-010, Graduate School of Economics Project Center, Kyoto University.
    4. JINJI Naoto & Xingyuan ZHANG, 2013. "Innovation in the Host Country and the Structure of Foreign Direct Investment: Evidence from Japanese multinationals," Discussion papers 13060, Research Institute of Economy, Trade and Industry (RIETI).

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